In fact, that might be one of the most popular features of the Fall Creators Update because its predecessor, OneDrive Placeholders, was pulled just before the initial release of Windows 10 back in July of 2015.

So as you might imagine, users have started the upgrade process in anticipation of finding OneDrive Files On-Demand ready for the system but it is not there.

Turns out the OneDrive Files On-Demand sync client that is installed with the upgrade to the Fall Creators Update does not support the new feature because Microsoft is rolling the updated sync client separately over the next several days.

If you do not want to wait for the new sync client to arrive on your Fall Creators Update system you can force the update by visiting this OneDrive Files On-Demand Support Page and follow the instructions to grab the updated client.

This will work just fine for everyone on the Windows 10 Fall Creators Update but if your system is running Windows 10 S then you have a while longer wait. The OneDrive sync client on the support page linked above is a desktop software program that will not run on Windows 10 S systems because of the restrictions that are part of that operating system for safety and security.

I have learned from Microsoft that Windows 10 S systems should receive a compatible version of the updated sync client within the next week as it rolls out to end users.

So go ahead and grab the updated client if you are on a 32-bit or 64-bit version of the Windows 10 Fall Creators Update and hang tight of you are on Windows 10 S as that update will be out soon.

Update:I have just learned and verified that it is possible for Windows 10 S users to force the OneDrive sync client to update so that you can get Files On-Demand for the Fall Creators Update. Here is how you do it: